State One Page Summaries

The Administration’s Medicaid Regulations:
Summaries of State Responses
March 3, 2008
On January 16, 2008, the Committee on Oversight and Government Reform wrote to every State
Medicaid Director requesting an analysis of the impact on their state of each of the seven
Medicaid regulations issued by the Centers for Medicare & Medicaid Services (CMS). More
specifically, the Committee requested “an estimate of the expected reduction in federal Medicaid
funds to your state over each of the next five years and an estimate of the effect of this reduction
on Medicaid applicants and beneficiaries in your state.” As of February 29, 2008, the Committee
had received responses from the Medicaid Directors of 43 states and the District of Columbia.
The findings from these responses are set forth in the Committee Majority Staff report, The
Administration’s Medicaid Regulations: State-by-State Impacts (March 3, 2008).

This document supplements that report. It provides one-page summaries of the submission
received from each of the responding states. For each of the seven Medicaid regulations, the
summary presents the state Medicaid Director’s estimate of the amount of federal funds that the
state would lose as a result of the regulation in the first year and over the next five years. If the
state Medicaid Director indicated that the regulation would have a fiscal impact but was not able
to quantify the impact, the response was characterized as “Not specified.” If the state Medicaid
Director reported that the regulation would have no impact on the state, the response was
characterized as “None.”

Each summary also includes quotations from each state Medicaid Director’s response that
provides a brief snapshot of the Director’s assessment of the impact of a particular regulation on
beneficiaries or providers or on the Medicaid program. In many cases, in the interest of brevity,
these quotations are excerpted from longer discussions. For a full statement of the impact, please
refer to the original submission of each of the responding Directors posted on the Committee
website (www.oversight.house.gov). A list of the state Medicaid Directors who responded to the
Committee request may be found in Appendix A. The states profiled are:

Alaska Illinois Missouri Oregon
Arizona Indiana Montana Pennsylvania
California Iowa Nevada Rhode Island
Colorado Kansas New Hampshire South Carolina
Connecticut Kentucky New Jersey South Dakota
Delaware Louisiana New Mexico Tennessee
District of Columbia Maine New York Texas
Florida Maryland North Carolina Utah
Georgia Massachusetts North Dakota Virginia
Hawaii Michigan Ohio Washington
Idaho Minnesota Oklahoma Wisconsin

Alaska
Cost limits for public providers (CMS 2258-FC)

Loss of federal funds in 2008: None Over 5 years: None
Impact: “Estimate increase (emphasis added) ($1.25 million Federal) each year this
regulation is in effect to meet these new administrative requirements.”

Payment for graduate medical education (CMS 2279-P)

Loss of federal funds in 2008: $0.4 million Over 5 years: $3.2 million
Impact: “…Alaska needs 50 new physicians yearly to meet the growing need, [which]
will require an increase in funding, not less, to support this additional training expense.”

Payment for outpatient hospital services (CMS 2213-P)

Loss of federal funds in 2008: Not specified Over 5 years: Not specified
Impact: “Requiring Alaska to reduce rates for private clinics to no more than Medicare
guarantees some of these clinics will close, others will reduce services or not see
Medicaid eligible patients, and patients will get services in the more expensive
emergency rooms (ERs) and hospitals.”

Provider taxes (CMS 2275-P)

Impact: “Alaska has no provider taxes.”

Coverage of rehabilitative services (CMS 2261-P)

Loss of federal funds in 2008: $9 million Over 5 years: $45 million
Impact: “We fully expect there will be additional costs to the state (savings to the
federal government), but it must be noted that it is extremely difficult to estimate the
impacts of this regulation given the confusing language …”

Payments for costs of school administrative and transportation services (CMS 2287-P)

Impact: “What will be certain is schools will likely minimize or stop performing
Medicaid outreach activities.”

Targeted case management (CMS-2237-IFC)

Impact: “The biggest impact of the TCM regulation is the significantly increased
administrative burden for … small, remote providers.”

2

Arizona

Impact: “…we expect the impact to be significant. This proposed regulation will add
extensive administrative and bureaucratic costs to the health care system in our state.”


Impact: “This loss will exacerbate the physician shortage problem, possibly resulting in
reduced access to physicians, greater pressure to increase physician reimbursement rates,
and lower quality of care.”


Impact: “The new restrictions on hospital services could be costly for hospitals, since
some services would no longer be reimbursable as outpatient hospital services…”


Impact: “…Arizona’s premium tax is well below the proposed limits.”


Impact: “The rules appear to increase administrative costs associated with onerous and
duplicative planning and documentation.”


Impact: “All of Arizona’s students are likely to experience the impact of these rules as
schools are forced to cut programs to adjust to the loss of funding.”


Impact: “Arizona may be forced to cease case management functions not specifically
related to the management of medical services, to the detriment of its members.”

3

California

Loss of federal funds in 2008: $943.6 million Over 5 years: $4,718 million
Impact: “This proposal would have devastating impacts to California’s safety net
hospitals … it could result in significant payment disruptions for Alameda County and
the University of California …”


Impact: “The elimination of [federal GME funding] could place critical care in
jeopardy, create shortages of medical professionals, and reduce access to care.”


Impact: “California’s emergency rooms are in crisis status and this will lead to further
instability if reimbursement for the cost of care in these areas is significantly reduced.”


Loss of federal funds in 2008: $540 million Over 5 years: $2,700 million
Impact: “California has used health care provider ‘fees’ to improve the quality of, and
access to, care in nursing homes and centers for the developmentally disabled.”


Impact: “The impact of this rule is dependent on how aggressively CMS chooses to
interpret the rule’s elements … this rule puts at risk over $1 billion annually and $5
billion over a 5-year period for all of these services.”


Impact: “Currently Medicaid Administrative Activities (MAA) is claimed by almost
800 school units representing more than 56 percent of the school districts in California.”


Impact: “Potentially, California might conduct 100,000 fewer Medi-Cal beneficiary
TCM encounters.”

4

Colorado

Loss of federal funds in 2008: $142.2 million Over 5 years: $711 million
Impact: “…the regulations put the financial stability of the entire safety-net provider
community in Colorado at risk.”


Impact: “This would represent more than a 25% decline in revenue to Colorado’s
teaching programs and would force the programs to reduce staff and stop serving
Medicaid clients in their outpatient clinics.”


Impact: “The Department is unable to perform a comprehensive analysis due to the lack
of data and guidance provided by CMS. The Department predicts the rule would
dramatically change the State’s Medicaid reimbursement model for outpatient hospital
services … and will probably reduce the current payments to hospital providers.”


Impact: “…since the Colorado Medicaid program currently does not utilize provider
taxes, there is no fiscal impact to the state.”


Impact: “The Department is unable to perform a comprehensive analysis due to the lack
of data on which current providers are unable to meet the proposed requirements.”


Impact: “The regulation will have a significant financial impact on the reimbursement
to participating school districts…”


Impact: “The Department was unable to perform a comprehensive analysis due to the
lack of data and specific information…”

5

Connecticut

Impact: “The proposed regulation poses major challenges for the establishment of rates
at state facilities like Riverview Hospital.”


Impact: Not specified




Impact: “In Connecticut our entire $120 million nursing home user fee program ($60
million in federal financial participation) would be at risk. That would remove $60
million in funding to support skilled nursing facilities that are already hard-pressed to
provide care for 18,000 Medicaid recipients every year.”


Impact: “In Connecticut, this immediately would end our claim for federal financial
participation (FFP) for the Birth to Three program that provides early intervention
services for children with developmental delays.”


Impact: “But more important than the initial fiscal impact would be the effect that these
regulations would have on school outreach. … DSS cannot afford to state-fund an
outreach effort in 3,000 schools in 169 towns without the benefit of the federal match.”


Impact: “The proposed rule flies in the face of the philosophy behind the Money
Follows the Person program which CMS has awarded to Connecticut and other states
with the express intention of moving the long-term care population into the community.”

6

Delaware



Impact: “We would need to continue to pay the hospitals at the current rates and would
have to make up the federal share with state dollars.”


Impact: “…an additional FTE would be required in the Medicaid Reimbursement Unit
to analyze the cost data.”


Loss of federal funds in 2008: None Over 5 years: Not specified
Impact: “The proposed changes will have no immediate impact … [h]owever, Delaware
may wish to consider the imposition of provider taxes in the future…”


Impact: “…will place under hardship on individuals and their respective family
members as well as lead to the need for services in more costly and restrictive settings.”


Impact: “…merely shifts the financial burden of ensuring that children receive
medically necessary services in school settings entirely to the states.”


Impact: “This rule will have immediate and severe consequences for many individuals
receiving services through our home and community-based waivers.”

7

District of Columbia

Loss of federal funds in 2008: Not specified Over 5 years: $8.7 million


Loss of federal funds in 2008: Not specified Over 5 years: $73 million











Impact: Not specified by regulation. The estimated loss of $192 million in federal funds over 5
years “will have a substantial impact on District Residents and Medicaid recipients. Despite
losses in federal Medicaid matching funds, it will be necessary to continue to provide services
such as school transportation and targeted case management for foster care children. Thus,
services that were previously matched with 70% federal funds will now require completely local
funding… [this budget effect] will potentially result in a reduction of other vital services to
District residents and Medicaid recipients.”

8

Florida

Impact: “Based on the manner in which Florida reimburses providers operated by units
of government, this rule has no impact on payment to these providers.”


Impact: “In addition, Florida reimburses providers through a series of Medicaid
Disproportionate Share Hospital (DSH) programs. … One of the DSH programs is
specified to teaching hospitals. The state seeks clarification as to whether CMS-2279-P
impacts DSH program payments [$102.4 million federal funds per year].”


Impact: “There is no potential fiscal impact on Florida resulting from this rule.”


Impact: “There is no potential fiscal impact on Florida resulting from this rule.”


Impact: “If therapeutic foster care … were not available, children would require
placement in an institutional setting at the additional cost of $78,728,673 to the state of
Florida annually. The [federal] portion of this cost would be $44,741,505 annually.”


Impact: “This proposed rule change will result in the loss of [Medicaid] revenue for the
65 participating school districts (of Florida’s 67 school districts). … This will impact the
following school district services: care planning; service coordination; monitoring of
health services; referrals; and Medicaid eligibility determinations … school districts will
need to adjust funds accordingly.”



9

Georgia

Impact: “…reductions in access to care may result if facilities close without
supplemental DSH and UPL payments.”


Impact: “The state expects the long-term impact to result in less hospitals agreeing to be
teaching facilities, which will exacerbate the state’s physician shortage.”


Impact: “The state has not analyzed hospital billing practices to determine which
outpatient services would be subject to alternative pricing.”


Loss of federal funds in 2008: None Over 5 years: $721.8 million
Impact: “No direct beneficiary impact identified at this time.”


Impact: "While changes will be made to the state’s reimbursement for rehabilitative
services to comply with the new regulation, the state expects this change to be budget
neutral.”


Impact: “No direct beneficiary impact identified at this time. Schools will continue to
provide these services without Medicaid reimbursement.”


Impact: “No direct beneficiary impact identified at this time. TCM services would
continue to be provided by state social service agencies.”

10

Hawaii














Impact: “The State has not quantified the potential impact of the regulations on our Medicaid
budget. …We received CMS approval on February 7, 2008 [for an extension of our Section 1115
Medicaid demonstration, QUEST Expanded]…Under QUEST Expanded, we will pay a capitated
rate to a health plan to provide coverage of all State plan services, as well as home and
community-based long-term care services provided under 1915(c) waiver programs. Thus, we
determined that the impact of the regulations on our Medicaid program would be minimal, and
may only affect certain services that will continue to be provided on a fee-for-service (FFS)
basis.”

11

Idaho

Loss of federal funds in SFY2009: $2 million Over 5 years: $10.8 million
Impact: No estimated reduction on Medicaid applicants and beneficiaries.








Impact: “Unable to determine.”


Impact: Estimated reduction on Medicaid applicants and beneficiaries is 170 in FY2009
and 763 over five years.



12

Illinois

Impact: “Enforcement of the rule will create a serious funding problem for relatively
low DSH [disproportionate share hospital] states, like Illinois, that have relied on basic
Medicaid reimbursement to make up the shortcoming in their DSH allotment.”




Impact: The regulation “will constrain the ability of states like Illinois to use the room
in the UPL to supplement their relatively low federal DSH allotments.”




Impact: “Illinois currently spends about $286 million annually on rehabilitation option
service … lack of clarity prevent us from interpreting the effect of the rule.”


Impact: “An immediate effect will be to substantially impair the State’s ability to
identify and enroll low-income school children with medical needs — the very children
who might benefit most from the department’s medical programs.”


Impact: The regulation “affects significantly [administrative] case management services
that are … provided in Illinois to various populations, including pregnant women, infants
and toddlers, and children with specialized needs.”

13

Indiana

Impact: “The proposed rule would impose a cost limit for public health care providers
and alter the definition of a ‘unit of government.’ Both of these proposals would reduce
funding options for states and are likely to substantially reduce services for Medicaid
patients and the uninsured in Indiana.”


Impact: “The reduction in overall reimbursement that teaching hospitals could
experience as a result of this rule may have the unintended consequence of creating a
disincentive for hospitals to continue to provide graduate medical education programs.
This could lead to a future shortage of medical professionals, especially those providing
services to low-income or indigent patients, and bring about the same situation which
payments for graduate medical education were originally intended to remedy.”










Impact: “Indiana expects substantial negative fiscal impact associated with
implementing the provisions of the TCM IFR. Given the timeline for evaluating the IFR
and the lack of specificity in key areas, the State is unable to fully calculate those costs at
this time.”

14

Iowa



Impact: This estimate assumes elimination of direct medical education (DME) payments
only. If the regulation eliminates indirect medical education (IME) payments as well as
DME payments, the annual loss of federal funds would be $16.5 million.




Loss of federal funds in SFY2009: $1 million Over 5 years: Not specified


Impact: “Iowa implemented these changes prior to publication of the CMS regulations
on rehabilitative services, and as such, the regulations will not impact Iowa either
fiscally, or in terms of availability of services.”


Impact: “There will be a fiscal impact on school districts due to the loss of Medicaid
reimbursement for the change to transportation services. “


Impact: “These rules will likely have a cost to implement for the Medicaid program and
providers. A detailed fiscal analysis has not been performed.”

15

Kansas







Impact: “In regards to the proposed CMS rule, we do not know how the clarifications
may impact [the Kansas Medicaid Provider Tax] program. However, it is clear that loss
of this program has the potential to severely restrict KS Medicaid beneficiaries’ access to
hospital and physician providers. KS would anticipate a reduction of 25% in KS
Medicaid claims payment rates due to the loss of federal matching funds…”


Impact: “Undetermined.”


Impact: “School employees perform administrative activities such as determining
Medicaid eligibility and the management of community-based activities.”



16

Kentucky
Loss of federal funds in 2008: $21-$26 million Over 5 years: $118 million
Impact: “The primary loss would be in payments that could be made to Public Hospitals
who are an essential part of the Health Care safety network in this state.”

Impact: “…the hardest hit provider groups are Kentucky’s publicly funded University
Hospitals which provide the lion’s share of indigent hospital care for Kentucky’s poorest
citizens. The two University Hospitals are also the largest teaching hospitals in the state
and they can not afford to lose their Medical Education payments.”


Impact: “Obviously, cuts in services provided to recipients or even the number of
recipients served would have to be considered in order for Kentucky to absorb this large
financial impact … this regulation could have dramatic and real impact on all of
Kentucky’s 722,000 Medicaid recipients.”

Impact: “It is intuitive that there will be some impact as CMS continues to carve away
at the edges of what is an allowable Medicaid service … there will be considerable
administrative impact as multiple Kentucky Medicaid programs are reviewed to see if our
current covered services meet the new rehabilitation definition.”

Impact: “The regulation … would have a definitive impact on care to Kentucky’s
200,000 Medicaid children who are served through this program.


17

Louisiana

Impact: “This proposed rule will significantly increase contract costs to oversee
compliance with cost limits by public providers.”


Impact: “The elimination of federal funds for graduate medical education will severely
impact the ongoing maintenance of these educational programs.”

Payment for hospital outpatient services (CMS 2213-P)

Impact: “Implementation of this proposed rule may cause a loss of essential medical
services in underserved rural areas.”


Impact: “The provider fee on intermediate care facilities for the developmentally
disabled would have to be reduced.”


Impact: “As of February 6, 2008, 2,599 children are receiving MHR services and we
would estimate as many as 90% would no longer qualify for MHR under a strict
interpretation of the proposed rule. We cannot quantify the fiscal impact, since we don’t
know how many of these children would end up in [more costly] inpatient psychiatric
hospitals … detention facilities … or congregate care.”


Impact: “This will seriously impact the school districts’ ability to reach out to Medicaid
eligible children and link them to Medicaid covered services.”


Impact: “We anticipate that administrative costs will be incurred. However, we are
currently unable to calculate the total fiscal impact.”

18

Maine

Loss of federal funds in SFY2009: $36 million Over 5 years: Not specified








Loss of federal funds in SFY2009: $17.4 million Over 5 years: Not specified





Impact: “…the impact of the CMS revisions is often difficult to quantify — for example the
increased cost for required audit and billing procedures. However, the data presented [above] is
our best estimate of the impact based on our past claims data. …The detrimental effect on the
citizens of Maine will be substantial.”

19

Maryland

Impact: “Small safety net providers (especially in rural areas) who serve vulnerable
populations may have to discontinue services or reduce the scope and quality of
services.”


Impact: “If we are unable to convince CMS that this doesn’t apply to Maryland because
of our federal all-payor Medicare waiver, Maryland Medicaid could lose $7 million in
federal revenue.”


Impact: “It is not clear if this rule will affect Maryland because of the Maryland
Hospital all-payor waiver. We cannot estimate the fiscal impact at this time.”




Impact: “Approximately 30,650 Medicaid recipients currently receive services that
could be affected.”


Loss of federal funds in 2008: $1 million Over 5 years: Not specified
Impact: “[Children with IEPs needing specialized transportation to school] will
continue to receive transportation. Schools will need to make other cuts to make up for
the loss in revenue.”


Loss of federal funds in 2008: $66.2 million Over 5 years: Not specified
Impact: “It would disrupt case management services for vulnerable populations, create
tremendous new administrative burdens, and lower the quality of services. Currently,
approximately 200,000 Maryland recipients receive case management services.”

20

Massachusetts

Impact: “…without knowing precisely how CMS will define allowable costs under this
regulation, it is not possible to estimate the potential loss in federal reimbursement to
Massachusetts at this time.”


Loss of federal funds in FY2009: $21.1 million Over 5 years: $115.4 million
Impact: “…to the extent that providers have to adjust their practices to absorb this
potential loss of revenue, quality of or access to services could be compromised.”


Impact: “Due to lack of clarity in the proposed rule, we are unable to estimate the fiscal
impact. Depending on the actual intent of CMS … the impact would be significant.”


Impact: Refer to Joint Comments of 19 States (undated)


Impact: Estimated impact refers to day habilitation services only. “While we believe
this rule will also have a fiscal impact on additional rehabilitative services, lack of clarity
in the proposed rule makes it impossible for us to estimate the impact.”


Impact: “Massachusetts is concerned that this regulation will impede the
Commonwealth’s ability to connect children to needed services.”


Loss of federal funds in FY2009: $54.6 million Over 5 years: $284 million
Impact: “This estimate does not include additional, and substantial, costs for retooling
existing case management programs to comply with operational requirements dictated by
this regulation.”

21

Michigan


Loss of federal funds in FY2008: $225.9 million Over 5 years: $1,254.4 million
Impact: “All Medicaid beneficiaries could potentially be impacted by such a large
reduction in federal support. Public hospitals and physician services, along with public
health and mental health programs that receive Medicaid support, would be affected.”


Impact: “…it will reduce access to care for Medicaid beneficiaries who are served by
major safety net providers that have relied on GME funding for these past 42 years.”

Payment for hospital outpatient services (CMS 2213-P)

Impact: “…the state does not anticipate any reduction in federal funds as a result…”


Loss of federal funds in FY 2008: 10 million Over 5 years: 10 million
Impact: “Although compliance with the new provider tax regulation is presumed, the
language is sufficiently ambiguous to allow CMS flexibility to construe almost any
provider tax as impermissible.”


Loss of federal funds in FY 2008: $321.6 million Over 5 years: $1,729 million
Impact: “It is particularly confounding and objectionable that this regulation harms
children in a way that is discriminatory. Children who are delayed but who can achieve
function are barred from receiving services because they technically cannot recover what
they have lost.”


Loss of federal funds in FY2008: $22 million Over 5 years: $116.8 million
Impact: “If administrative outreach is eliminated, school-age children in Michigan will
lose an ideal access site for linkage to medical, social, and educational programs.”



22

Minnesota

Impact: “The payment limits and cost documentation requirements for payments
associated with local governments proposed in this rule impose an undue burden on states
with large rural populations where local governments may serve as the only option to
ensure access to needed care.”


Impact: “[Federal Medicaid law] imposes responsibility on states to ensure access to
care. Prudent funding of GME is an important part of meeting that responsibility.”


Impact: “When medical necessity requires the resources of an outpatient hospital
setting, payment commensurate with the use of those resources is appropriate even if the
procedure is more commonly performed in a less intensive setting.”


Impact: “Because of the ambiguity surrounding the interpretation of the hold harmless
provision of this rule, we cannot quantify the fiscal impact.”


Impact: “We believe that this rule will have fiscal impacts … [but we] cannot quantify
those impacts due to the uncertainty of how these rules will be applied.”


Loss of federal funds in SFY2008: None Over 5 years: $40.1 million
Impact: “The loss of schools as a locus for Medicaid enrollment will … result in many
missed opportunities to identify and enroll Medicaid eligible children and families.”


Impact: “We expect significant additional losses as CMS fully implements this rule.”

23

Missouri



Loss of federal funds in 2008: $91 million Over 5 years: $532.3 million




Impact: “The combined loss of federal funding for these four regulations for the next
five state fiscal years is an average of over $250 million annually. The effects are even
more severe when coupled with the corresponding loss of state funding which would
result in a total loss of an average of $400 million annually. Such a loss of funding
would cause significant cash flow shortages, causing a financial strain on Missouri
hospitals which service almost 850,000 MO HealthNew participants plus the uninsured.
This financial strain, in turn, will result in an adverse impact on the health and welfare of
MO HealthNet participants and uninsured individuals in need of medical treatment.”


Impact: “The MO HealthNet Division does not believe there will be a federal fiscal
impact from this proposed regulation.”


Impact: “Missouri provides the federal match for school administrative claiming to 392
Missouri school districts.”


Impact: “The fiscal impact to Missouri is unknown.”

24

Montana

Impact: “As a result of this change for units of government now being limited to their
costs, six facilities will see a decrease in revenue of approximately $1,000,000 total funds
(annually)…”


Impact: “Montana currently pays direct medical education to [14] facilities ... . Under
the provisions of this regulation, these programs would no longer be eligible for Federal
Funding reimbursement.”


Impact: “Because we have been following the Medicare reimbursement system policy,
this regulation does not negatively impact Montana.”




Impact: “Montana has significant concerns with the proposed regulations and the impact
for the clients that receive services in Montana. Due to our many questions and concerns
regarding this regulation, the financial impact is not known.”


Impact: “There are currently 72 Montana school districts and co-ops that participate in
the Medicaid Administrative Claiming program … payments will no longer be available
for administrative activities performed by school district employees or contractors. ”


Impact: “It will require a major restructuring of TCM services that are provided to
Montana clients.”

25

Nevada

Impact: “Nevada does not take exception to these requirements, as written, and has tried
to work with CMS to implement them … [however,] the State is once again faced with
termination of federal financial participation for essential services.”




Impact: “The more restricted definition of ‘outpatient services’ may not only reduce
hospital revenues by limiting/eliminating reimbursable services … but create major
access problems as well.”




Impact: “CMS’ efforts to draw these strong boundaries will leave no funding source
other than state general fund resulting in what we anticipate to be increased unnecessary
utilization of psychiatric residential treatment facilities (PRTF’s) and inpatient
hospitalization.”


Impact: “When the School District Administrative program is terminated,
[approximately 62,000 Medicaid-eligible] children will no longer have access to school
district staff with assistance with Medicaid enrollment or in accessing Medicaid
benefits.”


Impact: “There are several outstanding questions regarding interpretation of the
regulation. The entire risk to the program is approximately $28 million.”

26

New Hampshire

Impact: “The proposed regulation could prevent New Hampshire Medicaid from
accepting sources of funding that have traditionally been used to support the state match
required in SCHIP and impact the State’s ability to provide insurance coverage for 3,000
children already enrolled in the SCHIP program.”


Impact: “The proposed rule … will impact four of New Hampshire’s largest hospital
providers in the areas of both primary care and emergency services. These hospitals
served a total of 29,862 Medicaid recipients providing over 109,000 visits in FY 2007.”




Impact: “This regulation did not allow New Hampshire sufficient time to properly plan
for this reduction in the permissible tax rate and will result in a net reduction in New
Hampshire general funds of $1,400,000.”


Impact: Refer to State comments on NPRM dated October 8 and October 11, 2007.


Impact: Refer to State comments on NPRM dated October 25, 2007.


Impact: Refer to Joint Comments of Twenty-Three States and State Medicaid Agencies
dated February 4, 2008.

27

New Jersey

Impact: “In addition, the regulation calls for extensive reporting requirements, which
will create a significant administrative burden on the State.”


Impact: “New Jersey continues to struggle with retaining medical graduates in the State.
GME supports this effort.”




Impact: “The provider reimbursement related to collected taxes … is an important
source of revenue for New Jersey’s long-term care facilities and [because this
reimbursement will no longer be allowable, this regulation] could in turn affect the care
our Medicaid beneficiaries are receiving.”


Impact: “The proposed rule dramatically narrows the scope of services that New Jersey
can provide … thus limiting the number of children and adults who will be able to
receive much needed rehabilitative services and putting Medicaid beneficiaries at risk.”


Impact: “In New Jersey, the administrative activities performed by school employees
and transportation services are vital in ensuring access to Medicaid services for our low-
income children.”


Impact: “Case management is a vital component of New Jersey’s quality plan required
by CMS.”

28

New Mexico

Loss of federal funds in FY2009: $168.7 million Over 5 years: $1,444.3 billion
Impact: “The impact of this proposed rule would be a reduction in Medicaid applicants
and beneficiaries as a result of a decrease in service providers.”


Impact: “The impact of this proposed rule would be a reduction in Medicaid applicants
and beneficiaries as a result of a decrease in service providers.”


Impact: “There is no effect on Medicaid applicants and beneficiaries in New Mexico
due to this rule.”


Impact: “There is no effect on Medicaid applicants and beneficiaries in New Mexico
due to this rule.”


Impact: “…the regulations are unclear in aspects that may enable CMS to interpret the
rules in the future in ways that would unfairly penalize a state. Therefore, it is not
feasible to provide an estimate of the expected reduction in federal Medicaid funds…”


Impact: “This will significantly impact all children who attend publicly funded schools
in New Mexico. The annual loss of [federal and state Medicaid School Based Services
funds] reimbursed to school districts will result in the loss of school nurses, health aides,
behavioral health providers, therapists, and other health-related positions…”


Impact: “Recipients with the greatest health issues would experience more confusion
related to accessing services and delayed access to care as a result of this rule.”

29

New York

Impact: “[The financial losses caused by the rule] would have particularly negative
consequences on the NYC Health and Hospitals Corporation, services for the mentally ill,
early intervention programs, and New York’s nationally recognized service system for
the mentally retarded and developmentally disabled.”


Impact: “Eliminating Medicaid funding for GME would have a devastating impact on
New York’s GME programs … [which train] 15 percent of the nation’s physicians.”


Impact: “While it is difficult to determine the exact fiscal impact of this regulation on
New York’s health care delivery system, we anticipate that there would be a significant
loss of federal Medicaid funding.”


Impact: “If New York’s taxes are deemed impermissible under the proposed rule, the
State could suffer up to hundreds of millions of dollars in disallowances of federal
Medicaid funding annually.”


Impact: The rule “could jeopardize” annual federal funding for “services to children
under age three with developmental disabilities or delays, and for many of New York’s
programs for persons with mental illness…”




Impact: “…we anticipate that New York State providers stand to lose substantial
amounts of federal Medicaid funding.”

30

North Carolina

Loss of federal funds in FY2009: $430.6 million Over 5 years: $2,187 million
Impact: “The resultant loss of support for the state’s public and private hospitals would
… diminish the ability of the State to provide basic health care and services provided in a
hospital setting to Medicaid and indigent recipients.”


Impact: “If this rule is finalized, the financial stability of our safety-net teaching
hospitals will be jeopardized, affecting many of the state’s most vulnerable citizens
covered by the Medicaid program and served by these hospitals.”




Impact: “A reduction or elimination of these assessments would impede access to care
by Medicaid recipients in [nursing facilities and intermediate care facilities for the
mentally retarded].”


Impact: “We are unable to adequately project the fiscal impact at this time because of
remaining questions about how this regulation will be applied; however, we anticipate a
negative impact.”


Impact: “North Carolina Public Schools utilize funds from School Based Administrative
Claiming to ensure vital services and equipment for students with disabilities are
available.”


Loss of federal funds in 2008: Not specified Over 5 years: Not specified.

31

North Dakota

Impact: “North Dakota does not expect a fiscal impact from this regulation.”




Impact: “In order to determine the full impact of this proposed regulation, North Dakota
will need to calculate the Upper Payment Limit for clinics and outpatient hospital
services. … North Dakota has not completed this calculation.”




Impact: “North Dakota cannot estimate an impact.”




Impact: This estimate is for elimination of case management for children in foster care
or receiving protective services. “Other provisions of the interim final rule … will result
in the loss of federal reimbursement and/or the addition of staff…”

32

Ohio



Impact: “It will be very expensive for states to continue to pay for GME through state
only dollars.”


Impact: “Ohio has an UPL policy for outpatient clinics and the proposed rule will not
have any impact on the definition.”


Loss of federal funds in FY2008: Not specified Over 5 years: Not specified




Impact: “This may mean that more medical services will be provided by schools as
direct care and school-based providers may pursue payment from the MCPs for services
that were previously billed administratively…”


Impact: “Ohio believes that the regulation will result in additional costs as well due to
increased staffing needs, increased payments for case management activities, decreased
controls, the need to restructure eligibility/service authorization and other gate keeping
systems and significant changes to information technology systems to accommodate the
newly required fifteen minute billing unit.”

33

Oklahoma

Impact: “Oklahoma already fulfills this regulatory requirement.”


Impact: “The effect to hospitals would be to remove support for infrastructure and
administrative costs associated with the rotations of 1700 resident slots through 17
different hospitals.”






Impact: “…CMS will likely reduce payments to Foster parents…”


Impact: “Oklahoma has never implemented reimbursement to school districts for costs
related to transportation or administrative services.”


Impact: “The timelines imposed by the new regulations do not take into account the
realistic timeframe needed to establish the community ties and resources required by an
institutionalized individual for a successful transition back into the community. It is our
belief that such a drastic change in this arena will result in irreparable harm to an already
fragile population.”

34

Oregon

Loss of federal funds in FY2009: Not specified Over 5 years: Not specified
Impact: “…the administrative burden may cause smaller, typically rural providers to
withdraw from providing Medicaid services.”


Loss of federal funds in FY 2009: $21.1 million Over 5 years: $110.7 million
Impact: “We believe this proposal would undermine the nation’s already fragile health
care safety net and further limit or eliminate access to health care for millions of low-
income and medically fragile patients.”


Impact: “Oregon …would not be negatively impacted by the passage of this rule.”


Impact: “If the [nursing facility provider tax] is eliminated, the state will have two
options: (1) replace tax revenue with General Fund, or (2) substantially decrease nursing
facility Medicaid rates from their current level.”


Impact: “Adoption of the proposed rule would strain the provision of all education
services by requiring the state to allocate more money from the general education fund to
provide mandated IDEA services…”




Loss of federal funds in FY2009: $52 million Over 5 years: $288 - $316 million
Impact: “…activities that have historically been viewed as administrative and claimed
as such will no longer be reimbursed, have adverse impacts on rural communities’
support structures which in turn could reduce client access.

35

Pennsylvania

Impact: Refer to Joint Comments of 19 States, March 19, 2007.


Impact: “Teaching hospital deliver a significant share of the inpatient medical care
provided to Medical Assistance (MA) consumers in the Commonwealth, particularly in
the urban markets of Philadelphia and Pittsburgh … . Absent this funding source,
hospitals will be increasingly hard-pressed to serve the MA population.”


Impact: “The following … services would/may be impacted: outpatient hospital clinic
services; birth center services; renal dialysis center services; outpatient psychiatric clinic
services; psychiatric partial hospitalization services; family planning clinics.”


Impact: Refer to Joint Comments of 19 States and State Medicaid Agencies (undated)


Impact: “…the new rules could have a profound adverse impact on Medicaid services
needed by persons with mental illness and developmental disabilities…”


Impact: “Numerous times during the day, school personnel intervene with students who
suffer from physical or emotional problems. … The ability to continue to … finance
these specialized services is key to the problems posed by CMS-2287-P.”


Impact: “The unknown total fiscal impact of these changes leave the Commonwealth
open to an infrastructure breakdown within the local communities…”

36

Rhode Island

Impact: “The State of Rhode Island certified public expenditures are for school-based
administration furnished by Local Education Agencies (LEAs).”


Impact: “If adopted in its proposed form, this [regulation] would have no impact on the
State of Rhode Island.”


Impact: “If adopted in its proposed form, this [regulation] would have no impact on the
State of Rhode Island.”




Impact: “If adopted in its proposed form, this [regulation] would have an immense
impact on the State of Rhode Island.”


Impact: “…the State of Rhode Island will lose all [federal funds] for school-based
administration after February 26, 2008.”


Impact: “…the Rhode Island Medicaid State Plan has included targeted case
management (TCM) for as many as 12 discrete Medicaid-eligible populations based upon
age, disability, illness or condition … dating back as far as 1991.”

37

South Carolina

Impact: “We do not believe this regulation will have a significant impact on Federal
funds, applicants, or beneficiaries in South Carolina.”


Impact: “There would be no direct impact on the number of applicants or beneficiaries,
although there could be a negative impact on access to some hospital services.”


Impact: The regulation “would not have a significant impact on Federal Medicaid funds,
applicants, or beneficiaries in South Carolina.”


Impact: The regulation “would not have a significant impact on Federal Medicaid funds,
applicants, or beneficiaries in South Carolina.”


Impact: “This could have a negative impact on access to these services for beneficiaries,
depending on whether the State decides to replace these Federal funds with state funds.”


Impact: “This could have a negative impact on access to these services for beneficiaries,
depending on the extent to which the State absorbs these costs within the education
budget.”



38

South Dakota

Impact: “At this time, there is no estimated financial impact to South Dakota.”


Impact: “The need to train and retain primary care physicians in South Dakota is critical
to insure there is adequate access to care for Medicaid recipients. The rural nature of the
state adds to the challenges of recruiting and retaining primary care physicians. Medicaid
programs must be allowed to continue to assist in the funding of GME to insure these
programs remain sustainable.”


Impact: “Small, rural hospitals have indicated this regulation could present problems
with them being able to contract with healthcare professionals…”


Impact: “This proposed regulation has a nominal or no impact upon the Medicaid
program as currently administered in South Dakota.”


Impact: “If the rule prevents Medicaid from furnishing services to maintain function as
an acceptable goal of a rehabilitation plan, there will be a significant impact upon those
individuals who receive services through community mental health centers.”


Impact: “The proposed regulation has significant impact upon Medicaid funding and
provision of administrative services provided through school districts to over 69,000
children enrolled in South Dakota Medicaid.”



39

Tennessee

Impact: “Reductions of this size would obviously have a dramatic effect on Medicaid
applicants and beneficiaries in Tennessee.”


Impact: “Many rural and low-income areas of Tennessee would lose the services of
residents who are now available to provide care.”


Impact: “Tennessee does not pay for hospital outpatient services through its State plan.”


Impact: “Tennessee is concerned that [the proposed regulations] move away from the
clear cut rules that enable a state to determine whether it is or is not in compliance to a
more subjective test that is purposefully ambiguous.”


Impact: “The possible effect is unclear, but if CMS defines [intervention services to
children in the custody of the Department of Children’s Services] as ‘rehabilitation
services,’ then there could be an impact of $50 million to $60 million per year.”


Impact: None


Impact: “The recipients of case management services in Tennessee are, by and large,
among the most vulnerable persons in our program — children in state custody, persons
who are mentally ill, persons with mental retardation, persons who are aged and/or
disabled [and] require nursing facility care … . It is unfair to make these persons bear the
brunt of CMS’s ‘sledgehammer’ approach to cutting costs, as exemplified in this rule.”

40

Texas

Impact: “We estimate that each year, more than 185,000 Texans would be at risk of not
receiving hospital services or experiencing a significant reduction in services.”


Impact: “While the state does not currently have an active GME program … the state is
developing a proposal to implement a GME program.”


Impact: “This rule could impair access to preventive services in hospital outpatient
clinics.”


Impact: “Texas has used provider taxes to improve the quality of care provided to
consumers with mental retardation living in intermediate care facilities.”


Impact: “Adult day health care services enable elderly Texans to remain in their homes.
If [these] services are no longer reimbursable, [an estimated 21,000 elderly beneficiaries]
would be adversely impacted and nursing facility utilization may increase.”


Loss of federal funds in 2008: None Over 5 years: $49 million
Impact: “Eliminating this school-based Medicaid outreach, information and referral
program would potentially increase the number of uninsured children in Texas schools
and across the state.”


Impact: “This loss of federal funds would result in fewer dollars for direct delivery staff
in both the Child Protective Services and Adult Protective Services programs.”

41

Utah

Impact: “The impacted hospitals in Utah include … several small rural hospitals … .
The impact on these facilities may put some of them at risk for closure if local
governments will not provide further subsidies.”


Impact: “This reduction in federal GME payments may further exacerbate the physician
shortage in Utah.”


Impact: “The state does not anticipate a significant reduction in federal Medicaid funds
to our state or any effect on Medicaid recipients due to this rule.”


Impact: “The state does not anticipate a significant reduction in federal Medicaid funds
to our state or any effect on Medicaid recipients due to this rule.”


Impact: “If the Medicaid rehabilitation rule is finalized as proposed … [it] would result
in higher rates of inpatient care and institutional utilization, with untold costs to both [the
seriously and persistently mentally ill] consumer and system alike.”


Impact: “The loss of Medicaid administrative funds means the school districts must
absorb the administrative cost incurred in delivering Medicaid services to students.”


Impact: “In Utah, [the regulation] will prevent some individuals with the potential for
community living from doing so…”

42

Virginia

Loss of federal funds in SFY2009: $1.4 million Over 5 years: $7.7 million
Impact: “Possible loss of services furnished by some small government providers who
find the cost of a cost report outweighs reimbursement received.”


Impact: “The Department of Medical Assistance Services believes that paying for GME
benefits Medicaid beneficiaries.”


Impact: None


Impact: “Virginia does not have provider taxes.”


Impact: “Some long-term services may no longer be considered rehabilitation services.”


Impact: “Eliminating coverage for [school administrative] and transportation services
does not improve services to Medicaid recipients. It does just the opposite.”


Impact: “Undetermined. If transportation is eliminated from coverage under Medicaid,
costs may shift to state or local funds.”

43

Washington



Impact: “Effects on specific hospitals may cause reduction in access for Medicaid
beneficiaries.”


Loss of federal funds in 2008: None Over 5 years None


Impact: Unspecified


Impact: “[Approximately 1700 children per year] who have experienced child abuse and
neglect would no longer receive rehabilitation services for their mental health problems.”


Impact: “Reduced outreach and coordination of services for beneficiaries in 116 school
districts.”


Impact: “Implementation would cost a significant additional amount because it would
require a major overhaul of the case management system in Washington State...”

44

Wisconsin

Impact: “…the loss could be significantly higher depending on the interpretation of the
rule.”


Impact: “This loss of funding would critically harm the State’s medical education
programs.”


Impact: “Difficult to assess; dependent on how rule is interpreted”




Impact: “Difficult to assess; dependent on how rule is interpreted.”




Impact: “This is counter to the best interests of [children in the foster care system] in
addition to creating an onerous administrative burden for the state.”

45

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